The unexpected rise of dalit millionaires

For centuries, dalits have been at the bottom of the income and social ladders, despised and exploited. Independent India aimed to improve their lot through job reservations, but with very limited results. Nevertheless, empowerment through democracy and economic opportunities created by 20 years of economic reform have created an astonishing new phenomenon—the rise of dalit millionaires.

They have now established a Dalit Chambers of Commerce and Industry in Mumbai. It is no more than a start. But at long last, some dalits have ceased to be objects of pity, and become objects of envy.

The Economic Times has been running a series of features since July 18 on dalit entrepreneurs. Many came from lower middle class families, got a decent education, and then made good. But others came from labourer families, and their rise is especially heartening.

Bhagwan Gawai worked as a construction labourer as a boy in Mumbai. But he completed school and college, and then joined HPCL. He always got good appraisals but these were tampered with by caste-conscious colleagues, so he was denied the promotions he deserved. He sued HPCL on grounds of discrimination, and won. Later HPCL posted him in Dubai. There he acquired Arab friends who became his partners in a new trading business. This business now has a turnover of a whopping $20 million. He has also brought 30 dalit entrepreneurs together under a holding company, Maitreya Developers.

Sushil Patil’s father was a labourer in an ordnance factory, who educated his son. He had to plead with the college dean to waive the last year’s fees, which he could not afford. The investment paid off. Sushil was employed in various firms, but then decided to start his own business, with the help of small loans. He failed in a series of ventures. But he persevered, and ultimately set up a firm, IEPC, providing engineering procurement and construction services. This now has revenues of Rs 280 crore per year.

Ashok Khade’s father was a cobbler, working under a tree in Mumbai. Ashok went to college and then joined Mazagon Docks. He acquired skills in offshore maintenance and construction. Today, his company DAS Offshore is a major offshore services company and he now plans a jetty fabrication yard that will employ 2,500 workers. He does not believe in caste reservation—only 1% of his workers are dalits.

Another dalit, Balu, manufactures soldering equipment with revenues of Rs 2.5 crore. He says 32 girls in a row rejected him as a marriage partner because of his poor prospects! His weak business was regarded as insecure. He says many dalit businessmen hide their caste identity to avoid social sigma and loss of business. That mentality sorely needs to change.

In all these cases, education was a key input. Alas, rural government schools are so terrible that many dalits remain functionally illiterate and handicapped. Even so, they have made astonishing strides in the last 20 years, as revealed by a seminal study by Devesh Kapur and others.

This study looked at dalits in blocks in western and eastern Uttar Pradesh. The proportion of dalits owning their own business was up from 6% to 36.7% in western UP, and from 4.2% to 11% in eastern UP. The proportion in non-traditional occupations (like tailors, masons etc) was up from 14% to 37% in the east, and from 9.3% to 42% in western UP.

Many dalits in eastern UP were once locked into the halwaha (bonded labour) system. This has virtually disappeared: the halwaha proportion is down from 32.1% to 1.1%. The proportion of dalit households doing any farm labour has plummeted from 76% to 45.6% in the east, and from 46.1% to just 20.5% in the west. Encouragingly, the proportion depending on their own land is up from 16.6% to 28.4% in the east, and from 50.5% to 67.6% in the west.

Political parties shout themselves hoarse over job reservations. Yet, the dalit family proportion in government jobs has actually fallen from 7.2% to 6.8% in the east, and risen marginally from 5% to 7.3% in the west. Clearly, job reservation has not been a key factor in UP’s social revolution. The main drivers of improvement have been the new opportunities arising from fast growth created by economic reforms, plus the empowerment drive of dalit chief minister Mayawati.

Indian leftists keep chanting that economic reforms have created new inequalities. They may even criticize the rise of dalit millionaires as a new sort of inequality. Phooey! This is a magnificent success. It shows that dalits have become empowered enough to soar into the millionaire range. Long live such inequality!

DISCLAIMER : Views expressed above are the author's own.

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Swaminathan S Anklesaria Aiyar is consulting editor of The Economic Times. He has frequently been a consultant to the World Bank and Asian Development Bank. A popular columnist and TV commentator, Swami has been called "India's leading economic journalist" by Stephen Cohen of the Brookings Institution. "Swaminomics" has been appearing as a weekly column in The Times of India since 1990. In 2008, The Times of India brought out the book "The Benevolent Zookeepers - The Best Of Swaminomics".

Swaminathan S Anklesaria Aiyar is consulting editor of The Economic Times. He has frequently been a consultant to the World Bank and Asian Development Bank.. . .